Clarín, AFSCA conflict renews on ‘Unit 4’ assets

After a period of calm, a new controversy appears to be reigniting the battle between the AFSCA media watchdog led by Martín Sabbatella and the country’s media giant, Clarín Group.

On one side, AFSCA accuses Clarín of trying to get around requirements of the 2009 Media Law, while the media conglomerate says it is being treated unfairly by the government.

Each side held its own meeting yesterday with one topic: the so-called Unit 4. It is one of the six divisions included in Clarín’s readjustment plan filed last year by the media conglomerate after the Media Law was declared constitutional by the Supreme Court. Unit 4 includes cable TV channels El Trece Satelital, Magazine, Volver, Quiero Música and Canal Rural SA.

On Thursday, the AFSCA media watchdog rejected a request filed by the media giant to keep hold of the cable-TV licences. Clarín’s lawyers complained that the decision was groundless and accused the agency led by Sabbatella of arbitrary actions designed to damage the Kirchnerite administration’s media foe.

Following AFSCA’s rejection, US investor South Media LLC — the company that wanted to purchase Unit 4 — filed an alternative proposal to get a step closer to obtain the cable TV licences but also unlock the dispute between Clarín and the media watchdog.

Yesterday, Clarín shareholders approved the alternative offer, which included transferring the assets to an independent trust composed by both South Media LLC and Clarín Media Group. As the licenses are still in dispute, the proposal takes into account two possibilities. If Clarín is not ordered to divest, the shares would go back to the media group. If Clarín’s strategy fails, the US media group would take charge of the licences.

Sources from Clarín media group said that the state representatives who were present at the meeting did not vote in favour of the initiative, although they considered it was a “reasonable situation.” Sources from the AFSCA media watchdog told the Herald that they had not received a formal notification of the shareholders’ meeting so were unable to give their opinion.

AFSCA also meets

The members of the AFSCA board yesterday met to discuss their rejection to Clarín’s request to keep the Unit 4. The majority agreed that Clarín’s request was “extemporaneous” as there is an adjustment plan — which was accepted months ago by the agency led by the former mayor of state as it met the necessary conditions established in the law passed in 2009 but frozen until last year after several injunction requests filed by the media giant — and must be in progress. The only member of the AFSCA who did not agree was Marcelo Stubrin, the opposition representative at the boards of directors. He did not, however, oppose the decision, according to sources.

Even though Clarín presented an adjustment plan last year after the Media Law was declared constitutional by the country’s highest tribunal, the media group also tried to keep a judicial strategy, similar to the one it has followed since 2009. Before Clarín’s proposal was filed, Sabbatella attended Clarín’s headquarters in the City neighbourhood of Constitución to inform the conglomerate that if it refused to present a voluntary proposal, the agency would follow a compulsory readjustment plan, deciding what licences it had to sell in order to meet the conditions established in the 2009 anti-monopoly law.

Following the judicial strategy, Clarín last year filed an injunction request to prevent a compulsory readjustment. Over the past few weeks, the case started moving forward in the Civil and Commercial Appeals Court — a tribunal which has largely agreed with Clarín’s interests in the past.

Yesterday, however, members of AFSCA celebrated that the court decided to send the case back to Judge Horacio Alfonso, following a request filed by the agency headed by Sabbatella. Alfonso was the magistrate who in 2012 declared the Media Law constitutional.